President-elect Donald Trump has named billionaire Wilbur Ross Jr. as his Secretary of Commerce. The man who Fortune called the “king of bankruptcy” and “dean of distressed investing” has been criticized as a “vulture” capitalist who made a fortune while running roughshod over workers and “shedding retiree benefits.”
After a lengthy career leading the bankruptcy team at Rothschild Inc., Ross launched his own firm, WL Ross & Co., in 2000. Between 2001 and 2011, the Securities and Exchange Commission (SEC) determined, his company made more than $10 million from investors in improperly disclosed fees (for which the firm paid a $2.3 million civil fine as part of a settlement, but did not admit wrongdoing).
Here are some other things to know about the man who would be in charge of economic growth and opportunity in the new administration.
He was a top fundraiser and economic adviser for the Trump campaign.
Though Donald Trump did not disclose a single campaign bundler, ThinkProgress identified Ross as a “secret bundler,” based on his role as a “state victory finance chair” and “presidential trustee” for Trump and the Republican National Committee for New York and Florida, his having co-hosted a $25,000-a-person fundraising lunch in the Hamptons, and his previous service as a bundler to Mitt Romney’s 2012 campaign.
His initial endorsement of Trump in June was not totally helpful. In a CNBC interview announcing his choice, he opined that Trump’s pledge to wipe out the $19 trillion national debt in two terms was based on math that “probably doesn’t work.”
But after the conservative Tax Foundation’s analysis of Trump’s tax reform plan determined his proposals would significantly reduce revenue, Ross joined with business professor Peter Navarro to write their own “scoring” of Trump’s plan, affirming that it and other reforms would bring increased revenue and 3.5 percent annual growth. In October, the two also claimed that Trump could massively boost infrastructure investment at no cost to taxpayers.
He has been a major advocate for government privatization.
In the 1990s, then-New York City Mayor Rudy Giuliani (R) made Ross a “privatization adviser.” In that capacity, he helped push to privatize the city’s public television and radio stations and the Port Authority of New York and New Jersey, and worked to sell off empty lots to businesses.
In 1996, he explained his philosophy to The Bond Buyer. “Really, the ideal candidate for privatization is one that is very inefficient, very labor intensive, very bound into bad contracts, very underutilizing of capital as opposed to one that is hugely capital-intensive.” He went on to say he believed “there will be a whole practice developed where private sector companies will pay government right in front for the right to take over functions.” Savings, he argued, would come from divesting “activities which are not inherently functions of government,” such as utilities, toll roads, and gaming.
That same year, he told the U.S. House Committee on Transportation and Infrastructure’s Aviation Subcommittee that airports should be privatized too. “We believe that economics, not rhetoric, should determine which airports are privatized,” he testified. “If the Congress adopts this mindset, the Federal government, local government, the airlines, and the traveling public all will benefit. The right roles for the Federal government are those of facilitator of privatizations and recipient of both one-time sale and recurring tax proceeds. The wrong role is the present one — a warden imprisoning airports in the federal bureaucracy.”
He has been a big player in dirty energy.
In August, Wilbur’s company invested hundreds of millions into troubled energy debt, betting on distressed oil and gas companies. He did so while backing Trump, who vowed to drastically reduce government regulation of fossil fuels and greenhouse gases.
But perhaps more problematic was his role in a 2006 coal mine disaster. In January 2006, a collapse in West Virginia’s Sago mine trapped 13 miners. The mine’s owner: Ross’ International Coal Group.
Though the company downplayed its ties to the mine, the New York Post reported that an executive told the SEC Ross had been well aware of the history of safety issues at Sago — including 208 Labor Department citations in 2005. “He knew the mine was troubled,” the source told the paper. “[Ross] saw the mine as an opportunity to grab scale in mining [increase output] at a time when the market was exploding. They weren’t bad owners, but Wilbur would not have allowed a 60- to 90-day shutdown to deal with roof problems.”
Twelve of the 13 trapped miners died before rescue workers were able to reach them.
Though Ross has put his money into dirty energy, there is one group that he has little patience for: oil speculators. In 2011 he blamed them for rising oil prices and suggested they had slowed economic recovery by “one or two-tenths of a percent in gross domestic product growth.”
He does not share all of Trump’s most extreme positions.
In a 2010 interview with Charlie Rose, Ross expressed a number of political views that are not necessarily in line with Trump’s. He praised the Obama administration for the way it has treated him, including letting him a manage a public-private partnership to buy toxic assets. He said Obama’s Treasury Secretary Tim Geithner was doing a good job. He endorsed the idea of higher taxes for the rich, as long as middle class taxes didn’t go up. He called for more public funding for research and development and higher education.
Ross also talked about easy steps to reduce climate change — which Trump has called a Chinese hoax — urging more investment in rail. “We say we want to wean ourselves off foreign oil, but we have subsidized the growing of corn for ethanol purposes. Then we impose a tax on Brazilian ethanol which very low cost that comes in. Now is that a good idea, is that well balanced thing for government? I don’t think so,” he observed.
Perhaps most notably, he embraced immigration reform, especially increasing the number of visas for scientists and engineers. “People paint immigration with a big broad brush. Not everybody who wants to emigrate here is a drug dealer or somebody who is going to be a burden… A lot of people would like to come here are very well-educated, very professional people that could really contribute.”